Hire car excess ... company denying a refund

Transport
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I recently hired a car from Ace Rental Cars in Perth. Unfortunately, a car ran into the back of the hired vehicle, causing minor damage. I took the driver’s details and informed Ace of the accident.

I didn’t pay for extra hire car insurance, having travel insurance that covers the $5900 excess. I knew on the return of the vehicle they’d deduct the full amount from the credit card. I filled in a form as requested and they assessed the repair to cost to be $1394.14, which is covered by my travel insurance policy.

The issue is that Ace refuses to refund the difference between the repair cost and the excess I paid. Email correspondence is slow and I’ve found it impossible to speak to the assessors. They say they’ll only refund my money when the uninsured party pays up, if they ever do.

Ace have no justification to withhold my funds. The damage to the car is covered by me through my travel insurance, even though it’s not my fault.

I have started action though WA consumer affairs and reported the company to the ACCC. Is there anything else I can do to make the company act ethically?

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Hi @Tony-R, welcome to the community.

You are extremely lucky that you took out travel insurance to cover damage caused to a hire car. I hope you were not injured in the recent accident.

If ‘who is responsible for the crash’ hasn’t been confirmed, car hire companies withhold any refunds until such time it is confirmed. This is because until this is confirmed, the car hire company may be liable for the damage caused to the other car.

While it may be straightforward in your case that a car ran into the back of you, a car hire company will need to confirm you aren’t responsible for damage to the other vehicle. They may be unable to prove that you didn’t roll back into a stationary car behind you or reversed into another car for example. The other driver might be also making such claims trying to push blame to you/Ace Rental Cars.

It would be interesting to know if Ace Rental Cars or its insurer has confirmed responsibilities associated with the crash. Has this question been asked? Until this is done, it is unlikely you will have any success taking it further.

If the other driver claims that you reversed into them, it becomes a ‘I said - they said’ scenario. If the police weren’t involved, then the car’s insurer may then determine who they believe is ultimately responsible based on balance, with the information provided to them by both parties. Hopefully this doesn’t occur, but if it does, a possible outcome could include determining that you are responsible for the damage to the other car. This means the $1394.14 won’t be the total amount you are liable for.

Until responsibilities are known, it may not be possible to receive a refund as there could be outstanding liabilities associated with damage to the other vehicle. It is worth noting that if the other party is fully responsible, you may be within your rights (or your travel insurer) to make a claim against the other driver for all costs associated with damage to the hire vehicle.

Ace Rental Terms and conditions are also likely to state the process associated with damage to its rental vehicles.

Should Ace Rental Cars are unwilling to resolve the crash responsibilities and any refunds associated with the crash, it may also be worth gaining legal advice to determine the best approach to gain any refund, if any, you are entitled to. @grahroll has posted elsewhere in the community where to seek legal advice should it be needed by a consumer.

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Thanks for your feedback.

There we three other people in my vehicle that can confirm the other driver run into us. I took photos of the other car and the driver’s licence.

My insurance has already paid out for the hire car damage. I can reopen the claim if that’s not the end of it.

It’s annoying. If I’d not involved the other driver, just returned and said I didn’t know how the damage occured, it would probably be settled by now.

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While you may have evidence that you aren’t at fault, this doesn’t mean that the rental car insurer has drawn the same conclusion at this stage of the process. Their insurer needs to agree with this conclusion to be able to move forward with seeking a refund (as per my earlier post).

Unfortunately there are some within the community who don’t tell the truth or accept responsibility, hence why insurers carry out their own assessments and make their own determinations.

Hopefully, based on the information provided and that you have 2nd party witnesses, they will arrive at the same conclusion. That being, you’re not at fault.

Thanks for confirming. If the car rental insurer sees differently, at least your potential liabilities are still protected.

Possibly ask:

This might allow you to expedite actioning a refund from Ace Rental Cars.

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Thanks again for the useful information.

Should I inform the hire car insurers that there were passengers in the car that can corroborate my version of the facts?

What happens if the hire car insurance decides fault can’t be determined? Who pays what?

Some reflections regarding the perils of not taking out the hire car company’s damage waver …

  1. I haven’t paid this for years, relying on travel insurance to cover the excess in the event of an accident. I’ve saved $100s of dollars, but as is shown from my recent experience, it can be inconvenient in the event of a minor accident.

  2. It’s counter intuitive, but if you have a prang, you’re better off if it doesn’t involve third party. It’s also advantageous if the damage cost totals more that the excess. Judging by my recent experience, in both those cases the matter would have been quickly resolved.

I’ll update this post as things develop. Hopefully it will be useful for others in a similar situation.

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Yes. Ask the insurer if they need their statements. Having second party witnesses are better than none.

Did you have any any third party witnesses (e.g. another person not in either car but saw the crash) as these can be invaluable? They can be seen as invaluable as they don’t know those involved in the crash and are likely to be unbiased/independent.

Likewise if the police were involved. Police may decide who was responsible based on the evidence (witnesses, environment, vehicle damage and positions etc). I assume that they weren’t involved since it was a minor crash.

It could be that each pays for their own damage. Such could occur if the other driver states they weren’t involved or both parties blame the other for being at fault, information from both parties is contrary or there isn’t sufficient information to make a determination.

The other comment if your travel insurer paid you the $1394.14 (less any applicable excess) directly and not Ace Rental Cars, and if the other driver accepts fault and they fully cover crash costs resulting in full refund of you damage waiver by Ace Rental Cars, you will need to pay any monies back to your travel insurer.

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No, no third party witnesses. I didn’t think of it at the time. No police involvement. The damage was minor, and wouldn’t have prevented the hire car company from re-renting the vehicle. I’ve hired cars with more damage in the past.

I’m aware that if Ace refunds the money then that will go back to the insurer. There is no travel insurance excess for this payment.

Another left field question … there was a $60.50 assessment fee billed to me. Also credit card surcharge. If they deem the other driver at fault, can I insist that this is covered under the settlement? It’s specifically not covered under my travel insurance.

As an aside, the preliminary invoice that sent me did not allocate the credit card surcharge proportionately. The $60.50 was proximately doubled to $121.16 and only ~$20 added to the $5900 excess fee. I’ve asked them to explain this, and got a non-answer about credit card surcharges. I’ve resubmitted the question.

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I would be seeking a refund for these. If the other driver is found to be 100% at fault, you shouldn’t be out of pocket for the crash they caused.

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Again, thanks for your assistance. It’s helped a lot!

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Advice given here in the Community is not to be considered as legal advice, it should be seen as personal experience. Best advice is that you speak to a properly trained legal person. The link to Consumer Law centres that @phb mentioned previously is found at Free Legal Advice Centres, these are free advice and support centres. They will be able to give you legal assistance in determining what your rights are and how to proceed.

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I don’t regard this as ‘legal advice.’ That may come after the car company gives a decision regarding how things will proceed.

It never occurred to me that the insurance people may be looking to confirm fault rather than just demanding the damage be paid for. In this case, I think it’s a good idea to tell them there were three other people in the vehicle at the time, and offer to provide their contact details. (I need to check with the individuals that they are happy with me doing this.)

Personal opinion … hire care insurance is a ‘dog’s breakfast’ and could do with some regulation to standardise cover across the industry. Car hire insurance seems to be a marketing ploy … provide low competitive quotes then scare hirers into paying more before you collect the car to avoid the ridiculously high excess.

Using travel insurance to cover the excess can save substantial money over time, but can be problematical as in my current situation. It’s a risk you take. I’m reasonable confident I won’t be out of pocket but it looks like the process will take some time.

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I was responding to your first post about the matter, you made some statements about the withholding of your funds and what else you could do. It will cost you nothing beyond some of your time to get some competent legal advice, this advice may help you get a faster resolution to the problem you are facing.

Advice you have received here thus far has largely been personal non legal advice that may be missing important points, not saying that it is so but as we often advise people at the start of these types of concerns and having these types of issues, is that they seek professional assistance/advice. As @phb did in their first post

ACCC is unlikely to take action on your behalf about your case, they may do so if they feel there is a larger public interest in doing so or if the number of complaints has reached some threshold they maintain. Consumer Affairs usually has very little effect on recalcitrant businesses, though they remain an important step if further action is to be taken by the consumer such as going to a Civil and Administrative Tribunal.

AFCA often look into insurance issues, though I’m not sure that Car Hire companies fit within their remit. There will also be contract law at play here, again not something that usually is discussed beyond our opinions here.

Personal experience in a matter I was involved in many years ago, was that I was not refunded until the responsible party had paid the entire debt they owed which took several years to be cleared up. I wish I had been able to get the advice I needed then and had the knowledge I now hold about these issues. I seek legal advice at the beginning now, it often circumvents many issues I would otherwise face.

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I should have got some advice before going to the authorities. However, I still think I have a case.

I’m only asking for the insurance to refund the difference between the assessed damage, which has already been covered by my travel insurance, and what I’ve paid. The only issue is who’s at fault. Clearly it’s the other driver, he hit me while stationary, but as was pointed out, this can be disputed. If that happens, then I will be getting legal advice.

The hire car company won’t be out of pocket. They may well get the money out of the other driver in time, which will go back to the travel insurance company.

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I decided to take @grahroll and @phb advice regarding contacting a consumer organisation, and phoned Financial Rights. They we helpful and told me that Hertz is a member of the Australian Finance Industry Association (AFIA) and should comply with the Car Rental Code of Practice (CRCP).

Before I follow the Part E of the CRCP regarding making complaints, I have emailed the insurer, asking for further information (paraphrased):

  1. Who they think is a fault?

  2. How long do they wait for the third party to reply to them and what happens if they don’t?

  3. What action they will take if the third party doesn’t respond?

  4. Will they refund the damage assessment cost if the other party is shown liable?

I’ve ask for a response by Friday. We’ll see how it goes.

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Regardless of who was at fault or how the excess is disbursed you have a travel insurance policy (presumably) covering the accident. You should only be dealing with your insurance company and address any issues with them.

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The travel insurance company won’t engage the hire car insurance organisation. Don’t confuse what happens with regular comprehensive car insurance, where you just make a claim and they handle the rest.

My TI has paid up the assessed amount to me for the damage to the hire car. The argument with the hire car insurance is about getting the balance of my excess back.

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It doesn’t seem anyone is addressing the main issue, being that they have charged your credit card $5900 for repairs costing just $1394.14. I would immediately do a chargeback on my credit card on this basis which will motivate the car hire company to sort it out.

I can’t see how they have any motivation to chase the at fault party when you (and your insurance company) have already paid for the damages.

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Most car rental agreements allow charge of full loss damage waivers when the car is returned. At such time the car hire does not know cost to repair and doesn’t want to be in a position the driver disappears before cost of repairs are known. Some time after the cost of repairs are known. Hence why, where allowed for under a rental agreement, refund of difference is sought.

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Unfortunately, after delving through 40 pages of the rental agreement, it does say the Ace will hold the entire excess until they recover the money from the third party.

The insurer’s have replied to my email and confirmed that they regard the other party is at fault. There’s a 28 day process to get them to pay, after that they use an external debt collection agency.

They have taken on board my request to refund the difference between the excess and assessed cost of damage to the vehicle. I’ll just have to wait to see if they do the right thing.

I’ve enquired about that. Unfortunately my card issuer will not stop the charge, but I can dispute it. Do any of the experts think this is a valid strategy?

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It won’t work or be successful as it is a valid charge made to the card. There are specific requirements for a chargebacks to be successful - these are outlined by card issuers. Not liking a charge even though it is valid at this point in time, isn’t one.

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